Tuesday, November 26, 2013
NOVEMBER 26 = The Great Diamond Hoax of 1872
- from “Diamonds: The Rush of ’72,” by Sam North
This passage from Mr.North's novel describes the first step of an extremely daring scam that was pulled on one of the most prominent bankers in the country by a pair of Kentucky grifters. By the time their hoax was discovered and reported on today's date, November 26, in 1872 in the San Francisco Chronicle, it had come to involve some of the most prominent names in America. Greed would get the best of these tycoons, but it would wind up making a hero out of an unknown Geologist.
The Gold Rush Days in America
The Gold Rush which struck the United States and the rest of the world as a result of gold found in Sutter's Creek in January of 1848 had a huge impact on peoples lives. People from all walks of life abandoned everything to go and try their luck at getting rich quickly. The young Lieutenant William Tecumseh Sherman wrote: "Not only did soldiers and sailors desert, but captains and masters of ships actually abandoned their vessels and cargoes to try their luck at the mines. Preachers and Professors forgot their creeds and took to trade, and even to keeping gambling houses." So it is hardly surprising that more than a few people turned to fraud in order to make their fortunes. A common practice was that of "salting" the grounds of a mine. This meant taking a few pieces of gold, or a small quantity of gold dust and planting it on the grounds of a certain plot of land in order to make it seem to a gullible prospector, or a would-be investor that it was a claim rich with gold. Then the huckster doing the salting could sell the worthless claim for big bucks, and disappear with the loot.
Arnold and Slack Show Up With a Bag.
Well, it wasn't always the gullible who fell for this scam. Philip
Roberts Was "Very Much Elated...."
"Roberts was very much elated by our discovery, and promised Slack and myself to keep it a profound secret until we could
the Transcontinental Railroad (operational and linking the country by 1869) and dozens of other ventures. Amazingly enough for a supposedly shrewd businessman, Ralston swallowed the entire story - hook, line and sinker. He fronted the pair $50,000 to go back and check on the "mine" and come back with more evidence. So they took this cash, went to London, and bought more uncut, and crummy gems.
More Big Names Are Lured Into the Trap
While they were away, Ralston and Roberts lured more tycoons into this trap as investors, including William Lent, and Asbury Harpending, who was no more honest then the rest of these greed-heads, but who left an amusing, if self-serving memoir entitled "The Great Diamond Hoax and Other Stirring Events in the Life of Asbury Harpending." This fantastical memoir records the events in the summer of 1871 when the investors met with Arnold and Slack. By this time the two hucksters had their routine down pat, with Arnold playing the solid, taciturn man, while Slack appeared to be something of a sleeping blow-off:
"Slack was asleep like a tired-out man. Arnold sat grimly erect like a vigilant old soldier with a rifle by his side, a bulky looking buckskin package. Slack soon awoke and we discussed the business in hand in low tones. The men told a rather lurid story, but yet not improbable in it's way. They said they had luckily struck a spot which was enormously rich in stones, which they estimated to be worth two million dollars..."
Later the men met at a club and Harpending displayed the "find" for everyone to see: " A sheet was spread on my billiard table, I cut the elaborate fastenings of the sack and, taking hold of the lower corners, dumped the contents. It seemed like a dazzling, many-colored cataract of light". Their eyes dazzled by all of this loot, Ralston, Lent and Harpending in October of 1871 took all of this to be examined by no less than Charles Lewis Tiffany: yes THAT Tiffany, of Tiffany's of New York, the famous jeweler. By this
The Summer of 1872: The Plot Thins
By now the time had come to examine the mine site itself. A group including Henry Janin, respected engineer selected by Ralston & Co. was assembled, but because of cold weather did not depart for the
The Hoax is Finally Uncovered and Blown Into the Papers
At long last the hoax finally began to fall apart. By chance, Janin and his men were on an Oakland bound train on which a party of geologists
lead by Clarence King (pictured right), a Yale-educated geologist happened to be travelling. King had been fighting Congress for funding of his geological expeditions to the precise area wherein Janin and his "find" were. King and his men had surveyed the entire area and were well familiar with it. When they overheard Janin and his men talking about all of the gems that they were going to find there, King's ears perked up. Joining in the talk, they offered to go to the precise location and determine whether there were any jewels to be found. If there were jewels to be found there it would make him and his group of surveyors who had found no such thing look pretty lame. So in October of 1872, King and his men arrived at what they knew to be the Colorado location described by Janin. And they quickly concluded that the gems which had been found there had indeed been used to "salt" the area. It was not, they concluded a mine at all, and Ralston and his investors had been defrauded.
On Novmber 10, King went to Janin's hotel to tell him of his findings. “Through nearly all the night I detailed to him the discovery, and at last convinced him of its correctness.” King would later record. Janin and King went to Ralston and his men the next morning and spilled the beans about the enormous fraud to which they in their eagerness and greed had subjected themselves. And shortly thereafter the news was spread all over the newspapers, beginning with banner headlines on this morning's San Francisco Chronicle: “UNMASKED!” and below that: “THE MAMMOTH FRAUD EXPOSED”, “The Great Diamond Fiasco,” And along with that came the“Astounding Revelations.” which of course contained plenty of abuse of Janin for allowing himself to be so easily taken. Every one of the men in Ralston's group suffered extreme public humiliation for having been defrauded by these two seemingly unsophisticated bumpkins.
"The Great Diamond Hoax of 1872" by Robert Wilson, Smithsonian magazine, June, 2004
by Asbury Harpending, Publ. in 1913
"This Day in History" The History Channel Website
"Exposing the Great Diamond Hoax" by Cassandra Willyard, "Earth", Nov. 26, 2008
Arnold and Slack: http://jy3502.hubpages.com/hub/Old-West-Swindles-and-Cons
Wm. Ralston: http://en.wikipedia.org/wiki/William_Chapman_Ralston
Clarence King: http://en.wikipedia.org/wiki/Clarence_King
Clarence King, et al: http://www.earthmagazine.org/article/benchmarks-exposing-great-diamond-hoax